S&P 500 Futures Price Analysis: Eye a break below 3,400 amid rising channel breakdown

S&P 500 futures poised for additional downside.
Rising wedge breakdown spotted on 4H chart.
200-SMA on 4H is the level to beat for the bears.

Dhwani Mehta FXStreet

As a sea of red emerges across the European markets, S&P 500 futures also remains under heavy selling pressure, as the appetite for risk asset vanishes amid fresh coronavirus restrictions and US fiscal stimulus impasse.

The greenback remains bid amid a flight to safety while the futures tied to the US stocks tumble over 1% to reach a five-day low of 3,434.

The sell-off in the US futures is likely to extend, as bears eye a break below the 3,400 level amid a rising channel breakdown confirmed on the four-hour chart (4H) on Wednesday.

The Relative Strength Index (RSI) points south, at 37.16, still holds above the oversold territory, suggesting that there is more room to the downside.

Therefore, a drop towards the 200-4H simple moving average (SMA) at 3,389 cannot be ruled should the 50-4H SMA at 3,442 support give way on a sustained move lower.

On the flip side, any pullback attempts could meet fresh supply at the horizontal 21-4H SMA at 3,498.

All in all, the path of least resistance appears south.

S&P 500 Futures: 4-hour chart

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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